The Japanese yen dropped against the US dollar on Thursday, as the greenback strengthens with support from the Federal Open Market Committee (FOMC) minutes which revealed that the Federal Reserve could begin to taper its monthly asset purchases as early as December.
The Japanese yen dropped to a two-month low after Japan’s central bank decided to maintain its stimulus program.
The US dollar gained 0.67% to ¥100.70 as of 6:30am GMT, while the Japanese yen fell after the Bank of Japan (BoJ) maintained its stimulus program intact to achieve its 2% inflation target
“The BoJ will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen,” according to the statement from the bank.
FOMC Meeting Minutes
The FOMC meeting minutes revealed that the Federal Reserve could begin to taper its quantitative easing as early as December. The minutes stated “many members stressed the data-dependent nature of the current asset purchase program, and some pointed out that, if economic conditions warranted, the committee could decide to slow the pace of purchases at one of its next few meetings”.
The minutes also hinted the central back is looking for a way to lower or end its bond-buying program in the future. Fed policymakers have seen some improvement in the labour market but still expecting a pick-up in the economy.
On Wednesday, St Louis Fed President James Bullard also hinted tapering could begin in December and said if the Federal Reserve (Fed) see an upbeat data from the jobs sector in November, the US central bank might decide to scale-back on its monthly asset purchasing program at the next FOMC meeting scheduled to take place from December 17-18.
James also commented on the inflation, as it remains low and said that there is not enough pressure on inflation.
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